JP Morgan earnings on deck with lending, deal-making fees in focus
Solid consumer banking profits are likely to offset a slump in dealmaking fees and boost overall third quarter earnings for the country's biggest lender.
JPMorgan Chase (JPM) - Get Free Report shares edged lower in pre-market trading ahead of the banking giant's third quarter earnings prior to the opening bell.
Analysts expected JPMorgan, the country's biggest bank, to post a bottom line of $3.96 per share, up 18% from last year, on revenues of around $39.57 billion.
The bank is also expected to see profits from its consumer lending business rise as a result of the higher interest rate environment, offsetting a slump in global dealmaking fees amid a dearth of new listings and takeovers so far this year.
Merger activity is over the first nine months of 2023 is down around 27% from last year's levels, according to Refinitiv data, with around $2 trillion in deals completed - the lowest total since 2013. Overall third quarter fees, according to Dealogic, are down 17% from last year at $15.2 billion.
Investors will also focus on the amount JPMorgan, as well as other banks, set aside to cover the potential for bad loans. as well as the unrealized losses in bond portfolios linked to the surge in Treasury yields that extended from early August until the end of September and added around 70 basis points to benchmark 10-year notes.
JPMorgan shares were marked 0.42% lower in pre-market trading to indicate an opening bell price of $145.20, extending the stock's six-month decline to around 12.6%.
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